Aviva 2006 Annual Report Download - page 85

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 81
The Company’s Investor Relations Department is dedicated to
facilitating communication with institutional investors. The directors
consider it important to understand the views of shareholders
and, in particular, any issues which concern them. The Board
receives reports on the matters that have been raised with
management at the regular meetings held with the large investors.
During the year the Chairman and the senior independent director
held a meeting with the major institutional investors and the senior
independent director attended investor meetings with
management. In addition, the senior independent director is
available to meet with major shareholders to discuss any areas of
concern that cannot be resolved through normal channels of
investor communication and arrangements can be made to meet
with the senior independent director through the Group Company
Secretary. Similarly, arrangements can be made for major
shareholders to meet with newly appointed directors.
The Board consults with shareholders in connection with specific
issues where it considers appropriate. For example, the chairman
of the Remuneration Committee met with institutional shareholder
bodies and a number of major shareholders in 2006 regarding
the Company’s proposed changes to the directors’ pension
arrangements and the introduction of a long-term savings
arrangement, details of which are set out in the Directors’
remuneration report below.
The Boardis equally interested in the concerns of private
shareholders and, on its behalf, the Group Company Secretary
oversees communication with these investors. It is the practice
of the Company to issue a postage paid reply form with its
Annual General Meeting documentation to enable shareholders
to put relevant questions to the directors. This is considered to be
particularly helpful for those shareholders who are unable to attend
the meeting. Written responses are provided through a brochure
containing answers to the most frequently asked questions that is
also placed on the Company’swebsite. All material information
reported to the regulatory news services is simultaneously published
on the Company’s website affording all shareholders full access to
Company announcements.
The Company’sAnnual General Meeting provides a valuable
opportunity for the Board to communicate with private investors.
At the meeting, the Company complies with the Combined
Code as it relates to voting, the separation of resolutions and
the attendance of committee chairmen. Whenever possible, all
directors attend the Annual General Meeting and shareholders
areinvited to ask questions during the meeting and have an
opportunity to meet with the directors following the conclusion of
the formal part of the meeting. In line with the revised Combined
Code, details of proxy voting by shareholders, including votes
withheld, aremade available on request and are placed on the
Company’s website following the meeting.
The Company’sannual report and accounts and annual review,
together with the Company’sinterim reports, trading statements
and other public announcements are designed to present a
balanced and understandable view of the Group’sactivities and
prospects. The Chairman’s statement, Group Chief Executive’s
review, and Business review provide an assessment of the Group’s
affairs and they will be supported by a presentation to be made at
the Annual General Meeting.
Institutional investor
Morley Fund Management Limited (Morley), the Group’s asset
management company, believes that good governance contributes
to better performance and practices. Therefore, as a major investor,
the Group monitors the governance of the companies in which it
invests. To this end, Morley holds regular meetings with the senior
management of companies where it will raise matters which may
affect the future performance of those companies.
Morley maintains a detailed Corporate Governance and Voting
Policy as part of its investment strategy, which underpins its
approach to engaging and voting at company general meetings.
The policy also extends to cover social, environmental and ethical
issues. Its policy is applied pragmatically, after careful consideration
of all relevant information. In addition, Morley makes detailed
voting reports available to clients’ and publishes summary statistics
on its website.
Directors’ responsibilities
The directors are required to prepare accounts for each accounting
period that comply with the relevant provisions of the Companies
Act 1985 and International Financial Reporting Standards (IFRS)
as adopted by the European Union, and which present fairly the
financial position, financial performance and cash flows of the
Company and the Group at the end of the accounting period.
Afair presentation of the financial statements in accordance with
IFRS requires the directors to:
–select suitable accounting policies and verify they are applied
consistently in preparing the accounts, on a going concern basis
unless it is inappropriate to presume that the Company and the
Group will continue in business;
–present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
–provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand
the impact of particular transactions, other events and conditions
on the Company and the Group’s financial position and financial
performance; and
–state that the Company and the Group have complied with
applicable IFRS, subject to any material departures disclosed and
explained in the accounts.
The directors are responsible for maintaining proper accounting
records which are intended to disclose with reasonable accuracy,
at any time, the financial position of the Company and the Group.
They are also ultimately responsible for the systems of internal
control maintained by the Group for safeguarding the assets of
the Company and the Group and for the prevention and detection
of fraud and other irregularities. Further details of the systems
of internal controls maintained by the Group are more fully
described above.
Going concern
After making enquiries, the directors have a reasonable expectation
that the Company and the Group as a whole have adequate
resources to continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the going concern
basis in preparing the accounts.